Transactional sex is associated with incident HIV infection among adolescent girls and young women (AGYW) in sub-Saharan Africa. Evidence on the dimensions of socioeconomic status (SES) which predict transactional sex are mixed and primarily come from cross-sectional studies. This study examined the association between SES and transactional sex in a longitudinal cohort (n = 844) of AGYW ages 15-24 years enrolled in a quasi-experimental study in Lilongwe, Malawi. Prevalence of transactional sex was 22% at baseline, 15% at 6-months and 20% at 12-months. Being divorced or widowed, being food insecure, living in a home without electricity or running water, and having few assets were associated with transactional sex. Higher educational attainment and school enrollment were protective. Having 6-7 socioeconomic risk factors increased odds of transactional sex (AOR = 4.13, 95% CI 2.45, 6.98). Structural interventions which address multiple dimensions of SES may reduce transactional sex and ultimately prevent HIV transmission among AGYW.